Airways Statement of Corporate Intent 2019

Airways Corporation of New Zealand Limited Statement of Corporate Intent    2020-2022

Appendix A: Financial Performance Metrics ($NZm)

INTRODUCTION AND NATURE & SCOPE OF ACTIVITIES

STRATEGIC CONTEXT

Actual FY18

Forecast FY19

Plan FY20

Plan FY21

Plan FY22

Year ended 30 June

X X Profitability Total revenue

AIRWAYS’ BUSINESS UNITS

214.5 236.8 268.0 282.1

295.5

EBITDA

54.5

56.8 33.5 23.4

70.1

81.6

93.7

EBIT

31.8

40.2

45.9 49.3

FY20 KEY STRATEGIC WORKSTREAM

NOPAT

22.9 1

25.7

29.6

29.5

X X Shareholders’ returns Total shareholder return 2

MEASURE OF SUCCESS

14.2% 10.6%

Dividend yield

4.8% 4.9% 5.2% 5.6% 6.0% 41.8% 50.1% 48.7% 40.3% 44.8% 18.5% 16.9% 17.1% 18.0% 16.5%

Dividend payout Return on equity

FINANCIAL FORECAST BY UNIT ($NZM)

ROE, adj for IFRS movements and assets revaluations

18.2% 16.8% 17.0% 17.9% 16.4%

DIVIDENDS

X X Profitability/efficiency Return on capital employed

19.3% 17.4% 17.1% 16.5% 16.5% 14.5% 13.5% 12.4% 11.5% 11.7% 25.4% 24.0% 26.2% 28.9% 31.7% 10.7% 9.9% 9.6% 10.5% 10.0%

REPORTING TO SHAREHOLDING MINISTERS

Return on assets

Operating margin Net profit margin

POLICY FOR SHARE ACQUISITION

Asset turnover

0.9

0.9

0.7

0.7

0.7

X X Leverage/solvency Equity multiplier

COMPENSATION FROM THE CROWN

1.7

1.9

2.4

2.4

2.3

Gearing ratio (net) – excluding leases Gearing ratio (net) – including leases

22.4% 31.1% 39.0% 41.5% 37.6%

51.6% 52.1% 48.5%

THE CROWN’S INVESTMENT IN AIRWAYS

Interest cover (before capitalised interest)

23.4

18.5

19.7

18.2

20.7

Solvency (current ratio)

0.7

0.7

0.8

0.8

0.8

APPENDICES

X X Growth/investment Revenue growth

4.6% 10.4% 13.2% 5.3% 4.8%

EDITDAF growth

(2.1%)

4.2% 23.5% 16.5% 14.8% 2.1% 9.8% 15.3% (0.3%)

DIRECTORY

NPAT growth

(3.3%)

Capital employed growth

11.0% 21.5% 22.6% 14.5% 1.5%

Capital renewal

2.0

2.2

2.9

2.3

1.2

1. Does not include a $4.2m gain on sale of surplus land 2. Company valuations are not forecast from 2019–20.

Definitions for the financial performance measures above are at the following link: https://treasury.govt.nz/sites/default/files/2015-09/fpm-soes.pdf

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